Twin Cities face shortage of qualified finance and accounting professionals in 2008, first Salo forecast predicts
Posted by Hannah Erdman Posted on
High Demand for Finance/Accounting Workers in the Twin Cities Mirrors Issues Throughout U.S.
The Twin Cities will likely continue to face a very competitive job market for finance and accounting professionals this year, according to findings from the first comprehensive market study conducted by an independent research company for Salo, LLC.
A shortage of finance and accounting talent is expected to hinder growth of Twin Cities’ companies and increase burn-out for current employees, the research showed. To stay competitive, companies are struggling to find ways to keep their best people and to attract top candidates. Nearly half of study respondents are using compensation and benefits with another 20 percent looking at ways to create a corporate culture that delivers real quality-of-life benefits in order to retain their current staff.
The first Salo Forecast was conducted recently by Satisfaction Management Systems (SMS), which is based in Eden Prairie, MN. The study involved in-depth, web-based interviews with senior level finance/accounting professionals from the Twin Cities’ services, financial, healthcare and consumer sectors. Respondents were equally split between private and publicly-traded companies. Participants were asked about their staffing plans for the first half of ’08; whether they anticipated a shortage of qualified candidates and, if so, in what functional areas and at what salary levels. They also were asked about their recruitment and retention strategies to identify and keep top performers. More than 100 web-based interviews were conducted. The vast majority of respondents hold Executive and VP titles, with either final decision making authority or significant influence in hiring decisions. Most respondents have been in hiring roles in the Twin Cities for 6-20 years. According to SMS president Jeri Meola, the findings are particularly significant because of the level and quality of the respondents. “We have established a sound baseline which will enable us to monitor trends on a regular basis,” she explained.
Nearly 40 percent of respondents said they anticipate a shortage of qualified workers in 2008, with 9 out of 10 saying the shortage will be driven by an insufficient supply of candidates with the required skills. At the same time, one-third of the Forecast respondents mostly executives and directors at publicly-traded corporations in the Twin Cities said they planned to increase their finance and accounting staff over the next six months, with a vast majority citing ‘business growth’ as the primary factor. Other reasons identified for staff increases included stepped-up compliance requirements and a desire to reduce individual workload.
SALO co-founder and partner John Folkestad said that the shortage of qualified finance professionals has been an ongoing national problem but there has been no in-depth data available to measure the severity of the shortage or its impact in the Twin Cities. “We thought it would be important for the business community to know if the Twin Cities was experiencing the same problem as other U.S. cities. We wanted to understand how companies here are handling the issues that are created by a potential talent shortage,” Folkestad explained. “As we have learned through the first Salo Forecast, Minneapolis/St. Paul mirrors the national trend with demand for accounting and finance professionals expected to outpace supply at least in the near-term,” he added.
Salo is making the detailed research findings available at its website. To read the Salo Forecast, visit: https://salollc.com.
Twin Cities Reflect Longer-Term, National Issue
The Salo Forecast confirms and expands a broad base of earlier research initiatives by the finance and accounting industry, the U.S. Department of Labor and the Minnesota Department of Employment and Economic Development all of which point to high demand for finance and accounting professionals at least through 2014. The U.S. Department of Labor’s Bureau of Labor Statistics, which tracks the job outlook for most major employment sectors, projects that employment opportunities for accountants and auditors will grow faster than average for all occupations through 2014.
According to Rachel Hillman, the Minneapolis/St. Paul Regional Labor Market Analyst at the Minnesota Department of Employment and Economic Development, there is definitely a strong demand for professionals in finance and accounting. “If we look at projections from 2004-2014, we anticipate that business/financial occupations will grow 20 percent in the Minneapolis/St. Paul metropolitan area, which translates into 23,000 new jobs. This is faster than the economy’s average,” Hillman explained. In addition to the need for new workers, Hillman said that the region will need to replace 20,000 workers who are expected to retire before 2014. “That’s a total of 43,000 business/finance job openings by 2014,” she noted.
The Minnesota Society of Certified Public Accountants (MNCPA), which is working with Salo on this initiative, has been focused on the issue for several years. In fact, the Society has extensive and aggressive programs underway at a number of Minnesota’s universities to make accounting degrees a top choice for both undergraduate and graduate students. Its primary goal, the Society says, is to provide an ample work force for its members and for the Twin Cities’ business community. Betsy Adrian, president MNCPA offered insight into why the talent shortage is occurring. “In terms of the next generation of accountants,” Adrian said “the 22 college programs in the state are all full and pumping out. The bottom line is that these programs may be inadequate. There isn’t any excess capacity: there simply are not enough accounting professors to go around,” she said. Adrian added that because supply of top talent is limited, the key for companies is to work harder at retaining their very best people. “And this is not all about money it’s overwhelmingly about quality of life,” she explained.
Salo Spearheads Movement to Address Staffing Issues
In light of the growing complexities of financial staffing and the trend data on talent shortages and increased demand through 2014, Salo said it will conduct its Forecast twice annually to ensure that the Twin Cities’ business community has the most current information and insights on the issues. In addition, Salo said it will incorporate the Forecast data into a larger report that includes opinions and insights on the problem from a broad group including university accounting program leaders, finance/accounting executives, independent finance professionals, the State of Minnesota and the MNCPA. The report, which is scheduled for completion by March 15, will also serve as a directory of resources in the metro for businesses that seek networking and recruitment venues and programs to augment their current efforts. The Salo Forecast Report will be issued jointly by Salo and the Minnesota Society of Certified Public Accountants.
Beyond the Forecast, Salo is considering organizing a consortium of academics, government officials, business leaders and finance professionals to pinpoint the drivers of the talent shortage and explore solutions to the problems in the Twin Cities business community.